The Kitchen Table

Can’t pay your bill? When financial hardship hits or an unexpected expense leaves you short, there are steps you can take to reduce the impact of falling behind. The first thing you should do is contact your lender and discuss your payment options. Explain why you are having a hard time making your payment, and ask the lender what options there are to keep you on track and avoid damaging your credit.

Talking to creditors about late payments can feel intimidating, but remember that your financial wellbeing is at stake and talking to your creditor is the best way to avoid your account being sent to collections. Keep a cool head, focus on the facts, and discuss specifics with your lender. Explain your situation. Are you laid off or did you lose a source of household income due to divorce? Examine your budget, and be ready to tell them how much you can afford to pay towards your debt this month. Tell them when you will be able to start paying the full monthly payment again.

If you fail to reach out to your creditor you may receive a “Notice of Right to Cure” in the mail. NEVER disregard a right to cure letter. It is often your last chance to address the problems surrounding your past due account. The letter will contain specifics about how far past due you are and it will tell you how much time you have to remedy or “cure” your default status. Disregarding this letter typically results in lawsuits, repossessions, and foreclosures.

Derogatory information such as; late payments, collection accounts, charged-off accounts, judgments and repossessions stay on your credit report for seven years. But they don’t have to, call your creditor if you think you can’t make next month’s payment—the person on the other end of the phone may be the only thing standing between you and long-term damage to your credit.

*The following is provided for informational purposes only and should not be construed as legal advice. If you need legal advice, contact a lawyer."